Dempsey: $500M is tax limit

BOSTON -- The House's budget chief appears to be dashing any hopes liberal Democrats and transportation activists might have of forcing legislative leaders back to the negotiating table with Gov. Deval Patrick over tax hikes, indicating $500 million was as high as House leaders are willing to go.

Ways and Means Committee Chairman Rep. Brian Dempsey said late Friday that failure to pass the House and Senate leadership proposal dedicating $500 million in new revenue toward transportation would risk higher near-term MBTA fares and service cuts, jeopardize a $100 million increase in local road funding, and kill any discussion of expansion projects.

"We have looked at this and worked it and getting to a higher number does not appear at all likely, and I think putting the $500 (million) at risk means it would be hard for us to go back at this this year, certainly in time for the MBTA to have additional revenues to avoid fare increases and service reductions," Dempsey told reporters during a short discussion in the Statehouse press gallery.

Addressing what he described as "speculation" about the level of support for the leadership plan in the House and Senate, Dempsey said lawmakers are eager to move on from the transportation financing debate and leadership is "unlikely" to re-engage in negotiations with members or the governor over a bigger revenue package.

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The comments seemed directed at Democrats who might be considering voting against the smaller package, or mustering the votes to sustain a veto, in an effort to pass Gov. Deval Patrick's larger, $1.9 billion tax bill.

"We are optimistic and hopeful that the support is there to pass the bill as proposed," said Dempsey, a Democrat from Haverhill. "We only point out that it's going to be very, very challenging to do anything to get to a higher number, so if folks are thinking about perhaps not supporting $500 (million) with the idea that that will put everyone back at the table, highly unlikely that that's going to happen.

The legislative leadership's plan includes nearly a $250 million in new taxes on businesses with the remainder raised by taxes on tobacco and gas.

Patrick wants to raise the income tax, lower the sales tax and enact a long menu of other tax-code changes that he says will result in wealthier individuals paying the bulk of new taxes.

Patrick on Thursday vowed to veto the plan put forward by House Speaker Robert DeLeo and Senate President Therese Murray, calling it too small to address the state's needs. He said it hits middle-class taxpayers, and labeled it a "pretend fix" to a problem of underfunded infrastructure that has been neglected for years.

In a letter to supporters emailed through his political action committee on Friday, Patrick urged the public to call their legislators and weigh in whether they support his plan or theirs.

Dempsey said the Democratic leadership plan was "sensitive to the economic climate, sensitive to the middle class and one that is well balanced and provides for significant funding for transportation."

Rep. Colleen Garry, D-Dracut, said she will not support either plan because she will not support a tax increase.

"I still believe that we have not recovered from this recession completely," Garry said during a telephone interview Sunday night. "There are still people hurting out there and I think this is the wrong time to do it."

Patrick has said he remained open to resuming negotiations with House and Senate leaders, and supported the idea first pushed last week by Republicans of public hearings on the tax plan. But House members rejected the call for a public hearing on the bill this week as they teed up the tax plan for debate today.

The House Ways and Means Committee plans to release its full fiscal 2014 budget plan on Wednesday.

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